In August, David Lockton will celebrate 40 years in the insurance industry.
Since 2003, he has been the chairman of Lockton Companies, where he previously served as president and CEO. With Lockton at the helm, the firm has established an astonishing track record of four decades of continuous organic growth; in the 2015 fiscal year, its total revenue exceeded US$1.24 billion. Today, Lockton Companies is the largest privately held independent broker in the world.
Needless to say, Lockton and his team have scaled remarkable heights as a business. But for Lockton, the company’s crowning achievement is its culture. “When we were 50 people, we knew we had a different kind of experience for our customers,” he says. “The difference was that when customers walked in the door, they sensed they were the center of the universe, and we felt they were the center of the universe.
“We didn’t think we’d be able to be big and maintain that same kind of culture,” he continues. “Today, we have 6,000 people, and we have the same culture. In fact, I think it’s stronger than it was when we had 50 people.”
The cornerstone of that culture, according to Lockton, is that unlike competitors who focus only on profits, Lockton Companies puts the onus on customer satisfaction.
“A good portion of our people join us from our competitors, where they’ve been in an environment that is very focused on short-term profits,” Lockton says. “When they come to Lockton, they find out that they get rewarded for practicing the profession they’ve learned, and that they’re judged based on merit – and for us, merit is how you go about creating value for our customers.
“I think that just feels right to our people. I think the way that we care for our fellow associates feels right to our people. People get a certain energy out of it, and it’s contagious. And that is amazing to me.”
Maintaining that culture is a responsibility that Lockton takes to heart.
“As chairman, all I have to do is come in and foster that caring culture, and concern myself with how working at Lockton can be a fun, exciting and rewarding venture. And then I just get out of people’s way and let them do what they’re good at.”
Back to the start
Lockton grew up in Kansas City. After graduating from high school, he set his sights on a career as a trial attorney. His brother, Jack, the firm’s founder, tried to persuade Lockton to consider the insurance path, but Lockton wasn’t interested.
Things soon changed, though. “One day I came home, and [Jack] had bought the first new car in our family,” Lockton remembers. “It was a convertible Mustang. I think that’s when he got my attention. I changed my major from English to business finance, anticipating joining him.”
But before he would allow his brother to come on board, Jack wanted Lockton to get some real-world experience elsewhere. So Lockton began working at a bank, but quickly became restless, and his resolve to pursue an insurance career intensified.
“My wife and I invited my brother and his wife over for dinner on the patio one night, and I made my pitch that I was going to get into this insurance brokerage business,” Lockton says. “I wanted to do it with him, but I was going to do it whether he hired me or not.
“We had a pretty long evening … but by the end of the night, he had agreed that I could come to work for him.”
While the firm continues to sustain impressive levels of growth, Lockton Companies also places significant emphasis on giving back. “We make it our business to make our communities better – our community outside of our company and our community inside of our company,” Lockton says.
Last year, staff in the UK branches participated in Lockton Gets in Gear. Cyclists from all 11 UK Lockton offices took part in a mission to cycle between all of those offices, including those in Scotland and Ireland. The ride raised nearly US$100,000, which went toward construction of the Lockton Suite at London’s Great Ormond Street Hospital, a facility where parents of sick children can stay at the hospital.
Another endeavour targeted at Lockton’s internal community aims to provide support for employees in times of significant need.
“We set up a not-for-profit within our company called Associates Caring for Each Other [ACE],” Lockton says. “It’s always been amazing to me how associates band together to help people who are in trouble, whether they have a jobless spouse or a serious illness. I felt like it was a great thing we were doing, and we didn’t want to have people fall through the cracks, so we formalized it. I think we do a really good job of making sure that [when] our associates … have those kinds of critical needs … the opportunity is extended to associates to help them. And they come through every time.”
Looking to the future, what does Lock-ton’s chairman hope to accomplish?
“We’re very successful for a number of reasons, but two very important ones are that we’re privately owned – and so we’re able to stay focused on the customer and not get overly concerned about next quarter’s profits – and the other is that we’ve been able to attract a really great leadership team. Before I leave this place, I want to make sure that we have a model that will allow family ownership to be sustained through the future generations. I want to have the governance structure around that, and I want to make sure that we have all the right leaders in the right leadership positions to carry forward our success.”